One area to be looking at in the coming weeks is consumer confidence. The car market can provide a handy gauge on consumer confidence as a car is a large purchase that consumers only undertake when they are feeling confident. Let’s look at the sale from the three largest car markets: China, Europe and the US. This is particularly helpful as these markets also represent the world’s three largest economies, so it can provide an early indication of consumer confidence going forward.
The car market also impacts other industries
The car market not only gives a good indication on consumer confidence, but the car market is also a key metric to look at due to the knock on impact it has on a number of related industries. Here is a list of some of them that all come from the car market:
- Second hand market
- Spare Parts
- Legal accident claims
Car sales tumble
It is perhaps unsurprising that the car market has been hit hard recently with some poor results for car sales from China. Europe and the US. Although the latest data from the car markets show some consumer confidence returning in April, with a pull back from the worst levels, some of this year’s results have been very poor. Some of the highlights, or rather lowlights, have included the following:
- the worst January since 2015
- the worst February since 2010
- the worst March since 2009
- the worst April sine 2013
One aspect that may be worth considering is that with a number of employers likely to shy away from car transport in the future months we may see further falls in car sales. It will also be interesting to see if there is more permanent decline in the car market as consumer behaviour shifts on a more permanent basis. The move away from fossil fuels has been growing and this may be a catalyst for a permanent consumer change. The implication from this set of data is that a large number of related industries are going to feel the pinch going forward and this will weigh on GDP. The car market paints a bleak picture for consumer confidence going forward and would question the notion of a fast global recovery.